Executive Summary

Revenue grew 24.6% year-over-year to $184.9M; contribution profit rose 29.6% to $69.4M; adjusted EBITDA increased 135.5% to $19.8M with a 28.6% adjusted EBITDA margin .
Results materially exceeded prior Q1 guidance (revenue $170–$176M; CP $64–$66M; adj. EBITDA $15–$17M), and management raised FY24 guidance across revenue, CP, and adjusted EBITDA; Q2 guidance introduced with continued >20% revenue growth YoY at the midpoint .
Upside drivers: higher transactions from existing and newly launched billers, IPN momentum, repricing benefits, and scale efficiencies; ~72% of incremental CP dollars dropped to adjusted EBITDA, underscoring operating leverage .
Near-term catalyst: raised FY24 guide and sustained Rule-of-40 performance (Q1 at ~58%) signal durable growth and profitability trajectory, supported by strong bookings and backlog .

What Went Well and What Went Wrong

What Went Well

Strong bookings and implementation backlog exiting Q1; management cited momentum across utilities, general services, transportation/logistics, government, and financial services .
Strategic AI patent on an integration framework to accelerate onboarding efficiency over time; highlights forward-thinking execution and potential operational leverage from AI .
Operating leverage conversion: ~72% of incremental contribution profit dollars flowed to adjusted EBITDA; Rule-of-40 reached ~58 for Q1, the fourth consecutive quarter above the threshold .

What Went Wrong

OpEx expected to ramp mid-teens in 2024 (primarily sales and marketing), implying lower adjusted EBITDA margin versus the exceptionally strong Q1; management emphasized prudence on outer-quarter margins .
Contribution profit is inherently variable quarter-to-quarter (payment mix, biller mix, CPI, card fees), with Q2 CP growth guided to decelerate versus Q1 despite >20% revenue growth .
Tax provision was $3.534M in Q1; analysts noted an implied ~33% rate this quarter, with management guiding to use ~25% of non-GAAP net income for modeling going forward .

Financial Results

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$152.4	$164.8	$184.9
GAAP Net Income ($USD Millions)	$6.377	$9.402	$7.226
GAAP Diluted EPS ($USD)	$0.05	$0.07	$0.06
Non-GAAP Net Income ($USD Millions)	$10.928	$13.922	$12.180
Non-GAAP Diluted EPS ($USD)	$0.09	$0.11	$0.10
Contribution Profit ($USD Millions)	$61.493	$66.334	$69.367
Adjusted EBITDA ($USD Millions)	$15.539	$19.925	$19.813
Adjusted EBITDA Margin (% of CP)	25.3%	30.0%	28.6%

Segment breakdown (company does not report by segment; qualitative mix only):

Vertical Mix	Q3 2023	Q4 2023	Q1 2024
Utilities share of mix	Not disclosed	Not disclosed	Utilities remain >50% of mix (qualitative)
Other verticals (insurance, government, financial services, etc.)	Expanding presence (qualitative)	Expanding presence (qualitative)	Expanding presence (qualitative)

KPIs

KPI	Q3 2023	Q4 2023	Q1 2024
Transactions (Millions)	115.4	124.8	135.3
Revenue per Transaction ($USD)	See commentary (down modestly YoY; mix-driven)	Not disclosed	$1.37; flat YoY
CP per Transaction ($USD)	$0.53	$0.53	$0.51
Gross Profit ($USD Millions)	$46.910	$49.492	$52.725
Non-GAAP Operating Expense ($USD Millions)	$37.913	$36.707	$40.309

Estimate comparison (consensus unavailable at time of analysis):

Metric	Actual (Q1 2024)	Wall St. Consensus (S&P Global)	Result
Revenue ($USD Millions)	$184.9	N/A (unavailable via S&P Global at time of request)	N/A
GAAP Diluted EPS ($USD)	$0.06	N/A (unavailable via S&P Global at time of request)	N/A
Non-GAAP Diluted EPS ($USD)	$0.10	N/A (unavailable via S&P Global at time of request)	N/A

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2024	$720–$744	$737–$755	Raised
Contribution Profit ($USD Millions)	FY 2024	$274–$288	$281–$293	Raised
Adjusted EBITDA ($USD Millions)	FY 2024	$65–$75	$71–$79	Raised
Revenue ($USD Millions)	Q2 2024	N/A	$178–$183	New
Contribution Profit ($USD Millions)	Q2 2024	N/A	$68–$70	New
Adjusted EBITDA ($USD Millions)	Q2 2024	N/A	$17–$19	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023, Q4 2023)	Current Period (Q1 2024)	Trend
AI/technology initiatives	Focus on IPN scaling and platform capabilities; no AI patent discussion	Announced AI-based integration framework patent; expected onboarding efficiencies in outer years	New positive development
Instant Payment Network (IPN)	Growing contributor; aiming for profitability; strong bank bill pay integrations	Continues to fuel sales momentum; still <10% of business but growing	Strengthening adoption
Pricing/repricing	Benefits from CPI energy services deflation and repricing; favorable renewal pricing	Ongoing repricing embedded in regular process; ARPU improvements on new billers	Process institutionalized
Backlog/implementations	Robust backlog; improving onboarding pace post‑pandemic	Strong bookings and backlog; implementation pace improving; earlier-than-planned implementations contributed to Q1 upside	Improving execution
Operating leverage/Rule of 40	Exceeded Rule-of-40 in Q3 and Q4; high drop-through of CP to EBITDA	Rule-of-40 ~58; ~72% CP growth to EBITDA in Q1	Sustained strength
Macro/prudence	Cautious guidance due to macro uncertainty	Continued prudent posture; guidance reflects conservative assumptions	Unchanged cautious stance
Regulatory/legal (interchange MDL)	Not discussed	Potentially modest benefit if interchange improves; not quantified	Monitoring

Management Commentary

“We delivered year-over-year growth in revenue, contribution profit and adjusted EBITDA, all ahead of our long-term targets… we also exited the first quarter with a strong bookings and a strong implementation backlog” — Dushyant Sharma, CEO .
“We conceived and filed a patent for an AI-based integration framework… expected to add additional benefit towards onboarding experience and speed in the outer years” — Dushyant Sharma, CEO .
“First quarter revenue was $184.9 million… contribution profit was $69.4 million… adjusted EBITDA was $19.8 million… Our results came in higher than we originally expected” — Sanjay Kalra, CFO .
“We now expect revenue in the range of $737 million to $755 million… contribution profit $281 million to $293 million… adjusted EBITDA $71 million to $79 million” — Sanjay Kalra, CFO .

Q&A Highlights

Margins and OpEx cadence: Q1 adjusted EBITDA margin was 28.6%; OpEx up only 7.2% YoY in Q1, with catch-up planned to mid-teens growth (primarily sales & marketing), implying softer margins in outer quarters vs Q1’s strength .
Contribution profit variability: CP growth can diverge from revenue due to mix/CPI/card fees; Q2 CP growth guided notably slower than revenue due to seasonality and mix .
IPN update: IPN is growing and fueling sales momentum; still under 10% of business but contributing to wins (especially mid-tier banks/credit unions) .
Revenue per transaction/network fees: ARPU stability aided by better pricing on new billers and softer network fees; contribution per transaction improved YoY due to repricing and mix .
Tax rate modeling: For forecasting, management suggested using ~25% of non-GAAP net income, notwithstanding Q1’s higher provision .

Estimates Context

Wall Street consensus via S&P Global for Q1 2024 revenue and EPS was unavailable at the time of analysis due to data access limits. As a result, beat/miss versus consensus cannot be determined. The company materially exceeded its own Q1 guidance on all primary metrics (revenue, CP, adjusted EBITDA) .

Key Takeaways for Investors

Execution remains robust with broad-based transaction growth from both existing and newly launched billers, underpinning raised FY24 guidance and >20% revenue growth trajectory .
Operating leverage is a core asset: ~72% CP growth dropped to adjusted EBITDA in Q1 and Rule-of-40 performance of ~58 demonstrates durable profitability scaling .
Expect near-term margin normalization as OpEx ramps mid-teens for pipeline conversion and backlog onboarding; management’s prudent stance suggests balanced growth-investment tradeoffs .
Strategic IPN momentum and an AI integration framework patent point to structural advantages in onboarding speed and bank connectivity, supporting medium-term share gains .
Contribution profit variability (mix/CPI/card fees) should not distract from top-line and EBITDA-dollar growth targets; management can calibrate OpEx to protect EBITDA outcomes .
Tax modeling: use ~25% of non-GAAP net income per management; Q1 provision was elevated but not indicative of long-term modeling .
With FY24 guide raised and strong bookings/backlog, narrative supports continued estimate upward revisions once consensus is available, especially for EBITDA dollars .

Appendix: Source Documents Read in Full

Q1 2024 8‑K and earnings press release (Exhibit 99.1) .
Q1 2024 earnings call transcript –.
Prior quarters for trend analysis: Q4 2023 8‑K and press release and transcript – –; Q3 2023 8‑K and press release and transcript – –.

Note: No additional Paymentus press releases were found in the period window; the Q1 press release is furnished within the 8‑K as Exhibit 99.1 .

Paymentus Holdings, Inc. (PAY)·Q1 2024 Earnings Summary